Written by Nancy Wang – CRM Manager
In short, an employment service in China is a service between two entities to hire and manage employment relationships.
It is a service offered by HR agencies to help foreign companies not only find qualified talents in the country, but also manage labor contracts, payroll, and benefits for these companies’ employees.
Managing employment relationships in China is complicated because of the ever-changing laws and regulations.
In the article, we show you the main employment regulations in China and the best options to hire employees.
Understanding Employment Services in China
Definition and scope of employment services
Employment services encompass a wide range of activities and resources designed to facilitate the connection between job seekers and employers. These services play a crucial role in the labor market by assisting individuals in finding suitable employment opportunities while aiding employers in identifying and recruiting qualified candidates. In China, the definition and scope of employment services have evolved with the changing needs of job seekers and the dynamics of the job market.
At its core, employment services involve providing job-related information, guidance, and support to individuals seeking employment. This includes assisting with resume/CV preparation, conducting job searches, facilitating networking opportunities, and offering career counseling and coaching. Additionally, employment services may involve connecting job seekers with employers through recruitment events, job fairs, and online platforms.
The scope of employment services extends beyond traditional job placement agencies. With the advent of technology, online job platforms and professional networking platforms have emerged as essential components of the employment services landscape. These platforms enable job seekers to access a wider range of job opportunities, connect with potential employers, and showcase their skills and qualifications.
Furthermore, employment services also encompass training programs aimed at enhancing job seekers’ employability. These programs may offer vocational training, skill development workshops, or language proficiency courses, equipping individuals with the necessary tools to succeed in their desired career paths.
Overall, the definition and scope of employment services in China have expanded to include a diverse set of resources and activities that aim to bridge the gap between job seekers and employers, providing crucial support and guidance throughout the job search process.
Regulatory framework and government involvement
In China, the regulatory framework governing employment services is robust, with significant government involvement to ensure fair and transparent practices. The government plays a crucial role in overseeing the employment services industry, setting guidelines, and implementing policies to protect the rights and interests of job seekers and employers.
The Ministry of Human Resources and Social Security (MOHRSS) is the primary government body responsible for formulating and enforcing regulations related to employment services. It establishes licensing requirements and standards for employment service agencies, ensuring that they operate legally and adhere to ethical practices. The MOHRSS also monitors and evaluates the performance of employment service providers to maintain the quality and integrity of the industry.
Government involvement extends beyond regulation and licensing. The Chinese government actively promotes employment services through various initiatives. It encourages the establishment of public employment service centers, which provide job placement assistance, career counseling, and training programs to job seekers. These centers often collaborate with private employment service agencies to enhance their reach and effectiveness.
Additionally, the government supports the development of online job platforms and digital resources to facilitate efficient job matching and information dissemination. These platforms are regulated to ensure accurate job postings and protect users from fraudulent activities.
Government involvement in employment services also extends to policy initiatives aimed at fostering employment opportunities. The Chinese government implements measures such as tax incentives, subsidies, and support for entrepreneurship to stimulate job creation and economic growth.
Overall, the regulatory framework and government involvement in employment services in China reflect a commitment to safeguarding the rights of job seekers, promoting fair practices, and fostering a supportive environment for both job seekers and employers.
Benefits of Utilizing Employment Services
A. Access to a wide range of job opportunities
One of the significant benefits of utilizing employment services in China is the access to a wide range of job opportunities. Employment service providers, including traditional recruitment agencies and online job platforms, have extensive networks and connections with various industries and employers. They actively seek out and collect job listings from diverse sectors, ranging from finance and technology to healthcare and manufacturing.
By leveraging employment services, job seekers gain access to a broader pool of job opportunities that they may not have discovered on their own. These services often have robust search and matching algorithms that help job seekers find positions aligned with their skills, qualifications, and career aspirations. This broadens their chances of finding suitable employment and increases the likelihood of securing a job that aligns with their professional goals.
B. Expert guidance and support throughout the job search process
Employment services in China provide valuable expert guidance and support to job seekers throughout the entire job search process. Professional career counselors and recruitment specialists offer personalized assistance, helping individuals navigate the complexities of job hunting and maximize their chances of success.
These experts provide guidance in areas such as resume/CV writing, interview preparation, and job market trends. They offer insights into industry-specific requirements and provide tips on showcasing skills effectively. They may also conduct mock interviews and offer feedback to help candidates refine their interview techniques.
Furthermore, employment service providers offer ongoing support, answering queries, and addressing concerns that job seekers may have during their search. They serve as a valuable resource for job market information, salary negotiation advice, and networking opportunities.
Having access to expert guidance and support not only boosts job seekers’ confidence but also enhances their overall job search strategy. With the help of employment services, individuals can make informed decisions, present themselves more effectively to employers, and increase their chances of securing desirable employment opportunities.
C. Improved networking and professional connections
Employment services in China offer a significant advantage by facilitating improved networking and professional connections for job seekers. These services provide platforms and opportunities for individuals to expand their network and connect with industry professionals and potential employers.
Employment service providers often organize networking events, job fairs, and industry-specific gatherings where job seekers can meet and interact with professionals from their desired fields. These events create a conducive environment for building relationships, exchanging information, and exploring potential career opportunities.
Additionally, online job platforms and professional networking platforms offered by employment services enable job seekers to showcase their skills and qualifications to a wider audience. They can connect with professionals, join relevant industry groups, and engage in discussions that can lead to valuable connections and referrals.
By leveraging these networking opportunities, job seekers can expand their professional network, gain insights into specific industries, and increase their visibility among potential employers. Improved networking and professional connections significantly enhance job seekers’ chances of accessing hidden job opportunities and receiving referrals, ultimately accelerating their career progression.
D. Increased chances of finding suitable employment
Utilizing employment services in China significantly increases job seekers’ chances of finding suitable employment. These services provide access to a wide range of job opportunities, expert guidance throughout the job search process, and improved networking opportunities. By leveraging these resources and support, job seekers can enhance their job search strategy, align their skills and qualifications with relevant positions, and make informed decisions. The comprehensive assistance offered by employment services maximizes the likelihood of finding employment that matches their professional goals, leading to a more successful and fulfilling career path.
Overview of the recent employment law in China
Companies hiring employees in China need to understand key aspects of Chinese labor and contract laws and regulations.
In this section, we answer simple questions about the employment process and discuss the different types of labor contracts in China.
Employment contracts will not be subject to Chinese law unless they are signed through an entity in mainland China or if the overseas company is considered to be a permanent establishment in China.
If the company is qualified to employ an employee directly and decides to do so, it should be noted that the employer must sign a written contract with the employee within one month of the employee’s first day of employment with the company.
If the employer does not provide the contract after one month but within one year, the employer must pay the double monthly salary to the employee.
If the employee refuses to conclude a written labor contract with the employer, the employer shall, in accordance with the provisions of the Labor Contract Law of the People’s Republic of China, dissolve the labor relationship, notify the employee in writing, and pay the employee economic compensation.
If the employee does not conclude a written labor contract with the employer within one month from the date on which the employee begins to work, the employer shall notify the employee in writing to terminate the labor relationship without paying economic compensation, but shall pay the labor remuneration for the actual working hours.
When does the employment relationship start in China?
The employment relationship is regarded as starting from the employee’s first day of work in the company, not from the date of signing the contract.
Should labor contracts be written in Chinese?
In general, a bilingual contract will automatically default to Chinese as the authoritative language if it does not specify which language is the controlled version.
Therefore, for the sake of legal certainty, foreign investors are recommended to sign contracts in Chinese.
Types of labor contracts in China
According to different definitions, Labor contracts in China can be divided into three types:
1) Fixed term labor contracts
A fixed-term contract establishes the relationship between employer and employee over a fixed period of time. It can be used for part-time or full-time jobs.
Part-time workers have five characteristics:
- The average working time of employees shall not exceed 4 hours per day and 24 hours per week;
- No probation period is allowed, and the employer or employee may terminate the agreement at any time;
- Employees are not entitled to severance compensation;
- Employers must pay the wages at least once every 15 days;
- Part-time employees do not need to receive a written contract.
The term contract is the most commonly used labor relation standard in labor contracts.
Compared with open-ended contracts, it gives employers greater flexibility to terminate and provides greater legal certainty to the employment relationship.
2) Open-ended contracts
A contract without a fixed term refers to a standard labor contract between an employer and a worker without a fixed term.
Generally speaking, there are four ways to obtain an open-ended contract:
- At the beginning of the labor relationship, the employer and the employee voluntarily sign an open-ended contract (not recommended);
- The employer fails to sign a written contract with a full-time employee who has worked for at least one year;
- The employer wishes to renew the contract of the employee for a second time, and the employee does not fall into any of the categories set out in the preceding two paragraphs (to be provided later) of “immediate termination of the contract due to employee misconduct” and “termination of the contract with 30 days notice and payment of compensation”;
- The employee has worked continuously for the same employer for ten years.
The indefinite term contract effectively guarantees the work safety of employees before retirement. The company will not be able to fire the employee at the end of the employment contract because the employment contract is no longer limited to the period of employment. This means that the employer can only terminate the employee by mutual agreement or for valid reasons.
3) A labor contract whose term is the completion of a certain task
A labor contract is defined by the task or project to be performed by the employee, not by the length of time.
This type of contract allows a company to hire a person to perform a specific project. Once the project is completed, the employment relationship is over. At this stage, the company is required to pay severance to the employee accordingly.
In addition, the employer may not establish a probation period for the labor contract. For these reasons, most employers avoid this arrangement.
Clauses labor contracts in China
According to the relevant laws, the labor contract in China must include:
- Name and address of the company and the name of its legal representative or senior management personnel;
- Name, valid address, and identity card number of the employee;
- Starting date and term of the contract;
- Job description and place of implementation;
- Salary details;
- A statement that the employer will contribute to social security for the employee;
- Labor protection, working conditions, and prevention of occupational diseases.
It is suggested to add some clauses to the labor contract according to the specific situation, including:
- Probation period;
- Non-compete clause;
- Confidentiality clause;
- Allowances and benefits (especially for foreign employees).
Mandatory benefits in China
The mandatory benefits contribution are made by both the employer and the employee and they are actually applicable to both Chinese and foreign workers.
The mandatory benefits to include in the employment relationship are:
- Pension insurance
- Medical insurance
- Unemployment insurance
- Maternity insurance
- Work injury insurance
- Housing fund
Tip: if you want to know more about mandatory benefits in China, make sure to read our guide about China’s social security.
The role of employment service in China
In general terms, employment is an agreement between an employer and an employee that the employee will provide certain services. In return, the employee is paid a salary or hourly wage.
One of the role of employment service in China is to match job seekers with job opportunities, but this is only one part and the focus here is mainly on the employee side.
For employers, an employment service provider becomes important as a window on the country’s HR laws and regulations.
Especially in a country like China, HR is a complicated matter. The majority of the laws are written in Chinese and the regulations are constantly updated. Most of the time, it is not easy for foreign companies and investors to stay updated and be compliant.
An employment solution in China can help foreign companies to deal with all the aspects related to employment relationship, including contracts, benefits management, payroll, labor disputes.
But one question that often we receive from our users is related to the options to employ staff in China.
Three options to hire employees in China
- Employ staff through an HR agency – This is one solution adopted mainly by companies that already have a legal entity in China. As we mentioned before, managing HR and payroll can be troublesome and require full knowledge of the local law. Not managing the employees in the correct way can lead to compliance problems with the government. For this reason, companies in China outsource HR and payroll to a local HR agency that takes care of all the employment aspects.
- Labor dispatch – Another option used mainly by representative offices in China is the labor dispatch service. Labor dispatch is a triangular form of the employment relationship, where employees are hired by the host company from a dispatch work agency while they dispatched employees to work for the host company.
- Professional Employment Organization (PEO) – A PEO is the best solution for those companies that don’t want to set up a legal entity in China, but they still want to hire employees to manage the on-ground operations or to test the market. A PEO offers a full range of services including human resource outsourcing, payroll processing solutions, employee benefits services, and employee dispatch services.
How HROne can help you start your business in China
As a registered PEO in China, our services can help foreign companies whose business operations require them to hire local or foreign employees in China.
Some of the services included in our solution are:
- Candidate search
- Labor contract signature
- Monthly payroll
- Work visa processing
- Income tax compliance
- Employee social benefits
- Bonus & commissions
- Medical insurance
- Expense claim
HROne is one of the very few companies in China that obtained the ISO/IEC 27001:2013 certification for Information Security Management and the ISO 9001:2015 certification for Quality Management.
These certifications represent a certainty that the employees, processes, and the IT systems that we utilize here at HROne conform to the standard risk management processes and we can guarantee the compliance with the Chinese law.